Category: In The News

Port Apprehensions

Conservative Michelle Malkin posted an e-mail from a reader spelling out just what this deal covers:

DWI is not “buying the American ports” as I see frequently misrepresented in articles about this in the MSM. American ports cannot be bought.
They are buying the port operating division of a London-based, British-owned Peninsular and Oriental Steam Navigation Co. That purchase will include current contracts that P&O ports has with the various ports listed in the stories. There are other port operation companies out there. The port in New York or any of the other ports mentioned could choose to contract with some other company if they do not want DWI being responsible for operating terminals in these ports. As we understand it the same employees who work for P&O currently will still be the employees that work there after the purchase goes through.

I don’t think there are suddenly going to be Arabs running all over the ports. Anymore so than there already are. Actually because of regulations and unions, more and more of ocean shipping, port operations and terminal operations in America are being run by non-American companies.
As Instapundit’s reader observed, the UAE provided supplies for our troops in Afghanistan. Should we refuse that cooperation? If we don’t trust them to manage the non-security aspects of a port, why should we trust their drinking water? Why do we trust them enough to use Al Dhafra Air Base and other facilities on their soil?

We now know that nothing is set to change on how security at these ports would change under the deal – it would still all be managed by the Coast Guard.

Schumer is… what’s the word I’m looking for here… strongly misleading us. There is no “outsourcing of homeland security duties.” We’ve been snookered, folks. Schumer should put up some evidence to support his charge. As of now, there is nothing to indicate that the UAE or Dubai Ports World would have any control over security procedures at any of these facilities.

Or as Democrat Tom Barnett says:

After lecturing the Europeans over the cartoon flap, it’s awfully weird to watch the paranoia, racism, and pure political nonsense at work on the proposed purchase of a British port-managing firm by a Dubai corporation.
The message we send on this is clear: if you’re Arab, you’re immediately untrustworthy. Dubai seeks to become the Singapore of the Middle East, and watching that rather progressive model of capitalism + Islam reach out for this strand of connectivity in a venue it knows all too well (shipping) makes perfect sense.
Is it the pretense of these “hawks” that America somehow “secures” itself in a globalized world, not being able to trust any others in this process?
This thing is so overblown on so many levels as to be truly, madly, deeply stupid as a political football. Shame on any presidential types for grabbing this one and running with it. Our goal in the GWOT is to connect the Middle East faster than the jihadists can disconnect it, so again, what do we say here to the people of Dubai,who have–believe it or not–done plenty to aid our efforts in the region at great personal risk to their national security?
The biggest joke? This labeling of the contract as somehow putting the company in question in charge of our port security, when it’s only about managing commercial activities. The Coast Guard runs security for our ports–always has and always will. This is misrepresentation of the worst sort.
People act responsibly when you give them responsibility. Dubai has earned that trust. Either we’re true to our word or let’s just go Tom Friedman’s ‘cut-them-off-at-the-gas” proposal and tell the entire Islamic world that we accept Osama bin Laden’s offer of civilizational apartheid.
I’m with Bush on this one. He’s showing some serious maturity on a subject about which too many in Congress are acting childishly.

What’s really behind the Ports Deal

It’s no surprise – It’s money.

While we are concerned about the Dubai investment in our Ports, the actual players have larger ambitions, as they try to diversify their energy-centric economy. This e-mail sent to Michelle Malkin is insightful:

I work as a corporate lawyer at a large law firm that has a speciality in Islamic finance. The real reason Dubai Ports World is undergoing the transaction is because of an Islamic finance vehicle called the sukuk. The sukuk is essentially a commerical paper type of Islamic financle vehicle–it is essentially a “fake” bond to work around the Muslim prohibition on interest.
Now comes the interesting part.
As you might know, Dubai has recently christened (my word) its stock exchange. It hasn’t been very successful thus far–so they’ve been looking to acquire really high profile items to trade on it. (Note: they also tried to buy the Refco assets after Refco collapsed). If the Dubai Ports World sukuk goes through, it becomes the largest publicly traded sukuk in the world.
As a result, Dubai instantly becomes the place to go for Islamic finance in the world–and folks specializing in Islamic finance stand to make a great deal of money.

The Dubai International Financial Exchange (DIFX) listed the world’s largest Sukuk, worth US $3.5 billion, from Dubai Ports, Customs and Free Zone Corporation (PCFC) on Jan. 26th, 2006.

What was intended as a US $2.8 billion issue has instead rocketed to US $3.5 billion, after an overwhelming response from investors. Lead-managed by Dubai Islamic Bank (DIB) and Barclays Capital, the distinctive sukuk is also the first convertible instrument in the Islamic finance market.

The issue is just one of a series of initiatives designed to boost the PCFC’s corporate activities, ongoing business development needs and expansion plans; having secured key ports in India and Australia — markets in which fast traffic growth is anticipated… Its unique convertible structure allows partial redemption of up to 30% in the form of equity shares of the PCFC entities as and when they go for a Public Equity Offering within the next three years. If no Public Equity Offering takes place prior to the final redemption date, investors will be compensated with a higher yield.